JOHANNESBURG: South Africa’s rand retreated from a five-month high against the dollar early on Monday as the greenback strengthened, with China’s reimposition of a lockdown in Shanghai impacting risk taking.
At 0605 GMT, the rand traded at around 14.6100 against the dollar, 0.43% weaker than its close on Friday when it touched 14.4738, the strongest level since Oct. 21, after the central bank raised the repo rate.
South Africa’s rand weakens as US rate-hike bets lift dollar
“(The rand) has now reached its short-term technical support level around the 14.5000 level, where it has met with USD buying interest — this as the situation in Ukraine continues and the Chinese continue to battle another wave of COVID-19 infections,” Nedbank analysts wrote in a note.
Shanghai, China’s financial hub, went into a lockdown on Sunday as authorities ordered a two-phased shutdown, with firms and factories to suspend manufacturing, or work remotely during the nine-day period in order to carry out COVID-19 testing.
Investor focus was also on peace talks between Russia and Ukraine set to take place in Turkey this week.
Government bonds also weakened, with the yield on the benchmark 2030 maturity adding 5.5 basis points to 9.745%.
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